Bankruptcy can easily feel like failure when someone is facing the prospect, but it has many qualities for debtors that make it a fresh start. It is a way out of overwhelming debt that respects debtors' rights as well as creditors' needs when dealing with property and assets.
A trustee is appointed to acquire and sell all of a debtor's nonexempt assets, distributing all but an exempted amount to creditors with certified claims. A commission of the total of the sale applies as a fee for the trustee.
Certain debts cannot be resolved by Chapter 7 bankruptcy. Alimony and child support must be paid for the welfare of a debtor's child. Fraudulent debts, as well as tax liability and student loans, may also still apply to a debtor in bankruptcy. Certain types of consumer debt may require special attention.
Most people applying for Chapter 7 bankruptcy are facing high amounts a credit card debt and other unsecured bills. In addition, they rarely have any assets to counter the debt. Many people who properly file for Chapter 7 bankruptcy will clear all their debts.
Legal representation may increase the chances of successfully including all debts in a Chapter 7 bankruptcy proceeding. An experienced attorney specializing in liquidations and bankruptcy-related law can address debts as a whole for the filing.
Remember that certain assets are always going to be yours. A house up to a certain value, and a car that is required for work, can be retained to help a debtor get back to financial health.
Source: Ohio Bankruptcy Law, "Ohio Chapter 7 bankruptcy information," accessed Sep. 28, 2017